Uber, Airbnb and Deliveroo urge labour law shake-up

Online businesses including Uber, Airbnb and Deliveroo are urging the federal government to shake up employment laws to respond to the digital economy and the flood of on-demand workers but academics and unions want greater protections for this new breed of worker, submissions to a Senate inquiry into the future of work reveal.

Uber argues that workplace laws are discouraging the company from providing perks and benefits such as training to its drivers for fear they will be classified as employees while Deliveroo has urged the inquiry to create a new class of employee.

"A potential solution to this problem would be to create a wholly new category of employment which would provide a level of security while at the same time allowing companies to calculate entitlements based on services delivered. This would provide those who fall into this new category with both security and a highly flexible relationship," Deliveroo said in its submission to the inquiry, backing proposals they have also made in the UK.

William Shu is founder and global boss of Deliveroo, the food delivery company planning a $2bn float – and wants a new class of flexible workers. Pat Scala

3.5 million jobs at risk

The Senate inquiry has received more than 140 submissions and last week held public hearings in Perth and Melbourne where Atlassian co-founder Mike Cannon-Brookes warned the committee not to worry about regulating the gig economy but to act now to deal with the massive job disruption which will be caused by automation.

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Google's submission estimates that 3.5 million workers are under threat of having their jobs disrupted by technology. Hundreds of thousands of professional drivers and those who perform predictable office tasks are most at risk and likely to cause broader societal problems if they are not retrained, the company contends.

Online jobs site SEEK has also warned the Labor-dominated inquiry that automation will lead to a hollowing out in the middle of the labour force, with high- and low-skilled jobs on the rise but middle-skill roles being cut. This will lead to an over-supply of workers for low-skilled jobs which will cause wages to fall.

However, much of the committee's focus has been on the new class of flexible, on-demand workers working in the gig economy. Online businesses, including Uber, Airbnb and Deliveroo, warn that current labour laws are out of date.

"While casual employment is more flexible than part-time or full-time employment, it is still subject to regulation that would be incompatible with the degree of flexibility that characterises the on-demand economy," Deliveroo said.

Deliveroo said casual employees are entitled to an hourly rate of pay, calculated by reference to the national minimum wage or applicable minimum award rate. The company claims such a model is incompatible with Deliveroo's fee per delivery model, where riders are paid according to each delivery they make, allowing them to choose their own working hours and making it easier for them to maximise their fees across multiple platforms.

Atlassian's Mike Cannon-Brookes says the inquiry should be more worried about automation than the gig economy. Louie Douvis

Test case

The gig economy is currently facing a test case on whether workers are independent contractors or employees entitled to minimum conditions after food delivery service Foodora fired one of its cyclists for refusing to hand over control of an encrypted chat group that its workers were using to talk about pay and conditions.

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The Fair Work Ombudsman has also launched two investigations into the gig economy involving Uber and Deliveroo.

"We believe that companies should be incentivised, not penalised, for helping independent workers access training, as well as other perks and benefits," Uber said in its submission.

The Productivity Commission said it had not reached a conclusion about the desirability of a "third way" between the traditional demarcation between an employee (who has many protections) and a contractor (who has very few protections), but a question is whether the current demarcation will be apt in the future.

Uber says it can't give its drivers training for fear they will be classified as employees.

However, academics and unions are calling for greater protections for this new class of workers with the Centre for Future of Work calling to "broaden the definition of 'employer' in labour law and employment regulations, so that digital intermediaries and other new business models cannot escape their normal responsibilities".

1 in 5 jobs won't exist

The debate is part of a broader discussion about the impact of automation and technology with SEEK warning that one in five Australian workers feel their job won't exist in 10 years, particularly across manufacturing and transport, construction, banking and financial services and call centres. One in four said they don't know how they will stay relevant.

SEEK is also concerned that IT undergraduate enrolments have declined by 38 per cent over the past 15 years and 65 per cent for female undergraduates.

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"The consequences of automation is what we call a 'hollowing out of the middle' ... this is a trend SEEK has observed for many years and shows no sign of abating," the submission by SEEK's CFO Geoff Roberts warns.

"As automation spreads across the economy, there will be more highly skilled, highly paid roles for the creatives, the developers, the scientists and the makers of the machines. "There is already a shortage of this sort of talent in the Australian labour force so we expect these shortages to only get worse."

At the other end, SEEK predicts a proliferation of service-based roles – particularly in caring and hospitality which require a degree of "problem-solving and physical dexterity not prone to automation". Medium-skilled jobs, a combination of blue and white collar workers whose roles are mostly process driven, will be squeezed out.

"Medium skilled jobs are being either outsourced or automated and we see this continuing. This is a fundamental change not just to the labour force but to society in general. Arguably, Australia's record economic growth has been on the back of this burgeoning middle class. With the hollowing out of the middle, there could be serious implications extending beyond the purely economic."

Google has flagged a $1.2 trillion automation boost to the Australian economy. Tamara Voninski

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Patrick Durkin is Melbourne bureau chief and Boss deputy editor. He writes on news, business and leadership, specialising in management and company culture. Patrick is a former lawyer and fellow of the Asia-Pacific Journalism Foundation. Connect with Patrick on Twitter. Email Patrick at pdurkin@afr.com.au

Based in our Sydney newsroom, David writes on news specialising in workplace, policy and leadership. He has been covering workplace relations for more than seven years and previously worked at Thomson Reuters as its industrial relations editor. Connect with David on Twitter. Email David at david.marin-guzman@afr.com.au